At the start of 2018, we find ourselves in the midst of an autonomous vehicles revolution. In the private sector, leading, and some nascent, autonomous mobility innovators have forged ahead with a surge of investment. Last year, The Brookings Institution found that during a snapshot between 2014 and 2017, more than 160 investments worth more than $80 billion went toward the auto electronics, microchips, sensors, artificial intelligence and deep learning, digital mapping, ridesharing, physical systems, and other software needed to power autonomous mobility.

Some of transactions were large (e.g., GM acquired Cruise Automation for $1 billion); many others registered relatively smaller blips on the radar (e.g., NVIDIA’s $5.25 million investment in Optimus Ride, or Ford’s $6.6 million investment in Civil Maps). But the volume — and the acceleration of investment beginning in 2016 — speaks to a general dynamism in the autonomous mobility space.

Indeed, the race to become the first jurisdiction to have autonomous vehicles on the road is becoming an increasing priority for governments globally, particularly within the United States, Europe and Asia. A recent study from KPMG has ranked 20 countries on their readiness for autonomous vehicles. The United States and European countries ranked among the highest with the U.S. at third place, and the Netherlands in first. Although Singapore ranked second, other Asian countries didn’t rank quite as highly; South Korea tenth, Japan eleventh, and China sixteenth.

U.S. Developments

The federal government has been moving ahead apace in the new year. Autonomous vehicles are the subject of bipartisan legislation on Capitol Hill, where both the House (SELF-DRIVE Act) and the Senate (AV START Act) have developed (and, in the case of the House bill, passed) legislation that would allow innovators to seek exemptions from state and federal regulations that might ordinarily hamper the acceleration of new car design and technology deployments. The Senate bill is still under consideration and its author is making an effort to respond to concerns that Democratic members have raised about safety.

As highlighted by the KPMG study, the autonomous vehicle landscape in Europe is equally showing a bright future, and the race between Member States and European automotive companies to be the first the get driverless cars on the road is rife.

To ensure Europe remains competitive in this area the European Commission has been active with the development of various funding initiatives and working groups. In November 2016, the Commission published a strategy on Cooperative Intelligent Transport Systems (C-ITS) which examines possible legislative developments in this area. A public consultation on the specifications for C-ITS closed on January 12, 2018, with the results currently pending.

Legislative developments at Member State level have also been important in ensuring this race remains competitive. For example, as of July 2017 in Sweden, the Road Transportation Authority has been able to authorize permits to allow companies to trial autonomous vehicles on Swedish roads. Last year the Netherlands approved a bill which allows the testing of autonomous vehicles without a driver, and the UK’s chancellor announced in his 2017 autumn budget plans for new legislation which will allow self-driving cars on UK public roads without a driver behind the wheel by 2021.

Developments in China

The Chinese government is also in the process of developing rules of the road for autonomous vehicles. Notable examples include local road testing rules promulgated late last year in Beijing (Guiding Opinions on Accelerating Work Relating to Autonomous Vehicle Road Testing in Beijing (Trial)) (Dec. 15, 2017), as well as the forthcoming local rules expected to be announced soon in other cities. These local rules allow autonomous vehicle companies to apply for permits to conduct road testing and set out basic guidelines for eligibility and liability standards.

Also, multiple initiatives are underway at the national level. For example, the Ministry of Industry and Information Technology (MIIT) is in the process of drafting trial regulations for road testing of intelligent vehicles that will, among other things, “regulate road test applications, verification management, [and] accident liability allocation.” This work complements an earlier commitment to equipping more than 50% of new vehicles by 2020 with driver assistance systems, partial automation systems, or conditional automation, and 10% of new vehicles with Internet-connected driving assistance systems in China’s Medium- to Long-Term Development Plan for the Automobile Industry. (Apr. 6, 2017).

The landscape for autonomous mobility is taking shape, with an increasing need for partnership between governments, regulators, and industry. The UK, for example, recently announced its HumanDrive initiative in which Highways England have teamed up with academic institutions and companies such as Nissan, Hitachi and Renault to develop an autonomous car prototype which will conduct a 200-mile journey in December 2019. Last week, urban autonomous mobility took a leap forward when Airbus Group’s A^3 division staged a full-scale flight test of its autonomous vertical takeoff and landing (VTOL) Vahan aircraft. In recent days we’ve seen some of the reverberations of an industry bursting at the seams, with Baidu significantly updating its open-source autonomous driving platform, Apollo, and a coalition of thought leaders in autonomous mobility coming together around a set of shared mobility principles.

Stay tuned here for further developments at the intersection of autonomous mobility, technology, regulation, law, and policy.

]]>Exchanging Commercial Information–A Risky Businesshttps://www.globalpolicywatch.com/2017/10/exchanging-commercial-information-a-risky-business/
Wed, 18 Oct 2017 17:23:22 +0000https://www.globalpolicywatch.com/?p=8154Continue Reading]]>This case provides a stark lesson in competition compliance training: the infringement decision of the Competition and Markets Authority (“CMA”) was upheld against a company that, while it refused to join a cartel, still exchanged strategic commercial information with its competitors (while being recorded by the CMA…)

The circumstances represent a timely reminder of the steps companies must take to properly distance themselves from anti-competitive behaviour with competitors. As the CMA puts it:

– The exchange of competitively sensitive confidential information (i.e. regarding prices or pricing strategy) with competitors, even at a single meeting, can amount to a breach of competition law with serious consequences;

– If approached to join a cartel, or to become involved in anti-competitive arrangements (i.e. co-ordination of pricing or market sharing) businesses must immediately, clearly and unequivocally reject the approach. It is not enough to refrain from the price-fixing or market-sharing: the business (through its representatives) must leave the meeting and clearly and explicitly refuse to take part; and

– Very importantly, the business must also decline to take part in any discussions involving the sharing of confidential and competitively-sensitive pricing information.

The CMA’s infringement decision fined Balmoral £130,000 in December 2016, for the sharing of strategic commercial information on galvanized steel tanks (used to store water for sprinkler systems in large buildings). The conduct of the members in the related cartel was addressed in a separate infringement decision of the same date, and Balmoral assisted the CMA in its related criminal investigation. However, Balmoral appealed the CMA’s decision to the Competition Appeal Tribunal (“CAT”), reflecting its ‘deeply held sense of grievance at how it had been treated by the CMA’, a desire to repair its ‘unfairly and wrongly’ tarnished reputation, and the ‘inconsistent’ way in which the CMA approached its ‘credibility as a witness’.

Ironically, Balmoral – a new entrant in the galvanized steel tanks market in the UK – had actually increased competition in the market outside a pre-existing cartel. Balmoral’s competitors were becoming increasingly frustrated by the competitive offers it was making, sometimes pushing prices down by as much as 20%. This upset the market dynamic that had been operating for years, enabling the incumbents to divide the market between them and keep prices high. Inviting Balmoral to meet, the cartel members had hoped to persuade Balmoral to join them by disclosing their market sharing system. However, Balmoral steadfastly refused to get involved.

However, and unfortunately for Balmoral, there was a whistleblower at the meeting, as a result of which the CMA was making an audio-visual recording of the meeting and discussions. Consequently, despite Balmoral’s absolute refusal to join the cartel, the CMA built a case around its decision to remain at the meeting for over an hour after learning of the cartel, and sharing commercially sensitive information about its current and future pricing intentions (both for specific contracts for which the competitors should have been competing and pricing strategies for certain types of tank). The CMA found that this amounted to a restriction of competition by object in and of itself.

Balmoral argued on appeal that the CMA was wrong to conclude that generic comments exchanged with competitors at a single meeting were capable of reducing uncertainty in an already transparent market, such that there was an insufficient degree of harm to competition for the purposes of an object infringement. However, the CAT upheld the CMA’s infringement decision. It explicitly recognized that the purpose of the meeting for the other cartelists was to get Balmoral to join, which differed from Balmoral’s own initial purpose. It found, however, that, by the end of the meeting, Balmoral’s objective was to stabilise prices towards the higher end of the bands being discussed. It also found that a one-off exchange of future pricing information in a market with few customers and few competitors has the ability to affect a material number of bids, especially where the information involved Balmoral indicating that it was not seeking to push prices down (despite not actually joining the cartel).